Surace v. Danna

• Decision Date: 01 May 1928
• Citation: 161 N.E. 315,248 N.Y. 18
• Parties: SURACE et al. v. DANNA et al.
• Court: New York Court of Appeals Court of Appeals

248 N.Y. 18

161 N.E. 315

SURACE et al.

v.DANNA et al.

Court of Appeals of New York.

May 1, 1928.

Supplementary proceedings by Domenico Surace and others against Sam Danna, impleaded with Carmela Danna. An order of the County Court directing the payment of the judgment debtor's moneys in the Central Trust Company of Rochester was affirmed by the Appellate Division by divided court (221 App. Div. 785, 223 N. Y. S. 918), the judgment debtor appeals, and the Appellate Division certifies questions.

Order of Appellate Division and County Court reversed, and questions certified answered.

See, also, 221 App. Div. 833, 224 N. Y. S. 924.

The Appellate Division certified the following questions:

‘(1) Were the funds of Sam Danna on deposit with the Central Trust Company of Rochester, which were the avails of payments made by the Industrial Commission to Danna under the terms of the Workmen's Compensation Act, applicable to the payment of the judgment involved in this proceeding?

‘(2) Should the order appealed from have been affirmed as a matter of law?’

O'Brien, J., dissenting.

Appeal from Supreme Court, Appellate Division, Fourth department.

H. H. Cohen and Samuel J. Danno, both of Rochester, for appellant.

Jerry R. Leonardo, of Rochester, for respondents.

CARDOZO, C. J.

Sam Danna had an award of $3,500 from the State Industrial Commission under the Workmen's Compensation Law (Consol. Laws, c. 67) for injuries suffered in the course of his employment. He deposited the money in the Central Trust Company of Rochester. Thereafter a judgment was recovered against him for $558.15, and execution returned unsatisfied. Supplementary proceedings followed. On deposit with the trust company when the proceedings were begun was a balance of $2,600, a sum more than sufficient to satisfy the judgment. The judgment creditors obtained an order upon notice to the trust company and the depositor directing payment by the trust company to the sheriff of $591.22. The question is whether the moneys are exempt.

Workmen's Compensation Law (section 33) provides:

‘Compensation or benefits due under this chapter shall not be assigned, released or commuted except as provided by this chapter, and shall be exempt from all claims of creditors and from levy, execution and attachment or other remedy for recovery or collection of a debt, which exemption may not be waived.’

By concession the moneys due under the award would have been exempt from the pursuit of creditors before they reached the judgment debtor. The argument is, however, that they became subject to seizure the instant they were paid. If this is so, the exemption is next to futile. All that a creditor has to do is to obtain an order in supplementary proceedings, containing, like the order in this proceeding, the usual provision restraining the judgment debtor from making any transfer or disposition of his property until further directions in the premises. Then, as the installments of an award are paid, the injunction will tie them up. They may be appropriated to the last dollar in satisfaction of an ancient debt. They will no longer be a fund for the support of the indigent and helpless.

So narrow a construction thwarts the purpose of the statute. The Workmen's Compensation Law was framed to supply an injured workman with a substitute for wages during the whole or at least a part of the term of disability. He was to be saved from becoming one of the derelicts of society, a fragment of human wreckage. Matter of Post v. Burger & Gohlke, 216 N. Y. 544, 111 N. E. 351, Ann. Cas. 1916B, 158;New York Cent. R. Co. v. White, 243 U. S. 188, 197, 37 S. Ct. 247, 250, 61 L. Ed. 667, L. R. A. 1917D, 1, Ann. Cas. 1917D, 629. He was to have enough to sustain him in a fashion measurably consistent with his former habits of life during the trying days of readjustment. The cost of such support becomes a charge upon the industry without regard to fault. Rehabilitation of the man, not payment of his ancient debts, is the theme of the statute, and its animating motive.

[1][2] The exemption must have a meaning consistent with the policy behind it. Few words are so plain that the context or the occasion is without capacity to enlarge or narrow their extension. The thought behind the phrase proclaims itself misread when the outcome of the reading is injustice or absurdity. Smith v. People, 47 N. Y. 330, 341, 342;Matter of Meyer, 209 N. Y. 386, 389,103 N. E. 713, 714, L. R. A. 1915C, 615, Ann. Cas. 1915A, 263. Adherence to the letter will not be suffered to ‘defeat the general purpose and manifest policy intended to be promoted.’ Spencer v. Myers, 150 N. Y. 269, 27544 N. E. 942, 944, 34 L. R. A. 175, 55 Am. St. Rep. 675; People v. Lacombe, 99 N. Y. 43, 1 N. E. 599;Matter of Folsom, 56 N. Y. 60, 66; Kent's Comm. 462. We are told that the word ‘due’ must be held to limit the exemption to compensation owing and unpaid. But ‘due,’ like words generally (Towne v. Eisner, 245 U. S. 418, 425, 38 S. Ct. 158, 159, 62 L. Ed. 372, L. R. A. 1918D, 254;International Stevedoring Co. v. Haverty, 272 U. S. 50, 47 S. Ct. 19, 71 L. Ed. 157), has a color and a content that can vary with the setting. Compensation due under an act may be a payment presently owing, or one to become due in the future, or one already made, but made because due, i. e., required or commanded. Cf. Allen v. Patterson, 7 N. Y. 476, 57 Am. Dec. 542;United States v. State Bank of North Carolina, 6 Pet. 29, 36, 8 L. Ed. 308. If the narrower meaning is the commoner, the broader does not strain the word beyond the limits of construction. A workman, holding in his hands a payment made by his employer or an insurance carrier in satisfaction of an award, might say not inappropriately that the money so received was due under the statute. The argument is not compelling that some of the prohibited acts-assignment, release, commutation-apply to compensation before the stage of payment, because impossible thereafter. This does not mean that other acts-execution, attachment, supplementary proceedings-appropriate or possible in later stages must be fitted to the same mould. The maxim, ‘reddendo singula singulis,’ supplies the applicable rule.

The fundamental policy of workmen's compensation is a token of intention to be ranked as first and foremost. It is reinforced by others. Section 33 as first enacted was to the effect that ‘claims for’ compensation or benefits were not to be assigned or released and were to be exempt from legal process. By the amendment of 1922 (Laws 1922, c. 615) the words quoted are omitted. Under the statute as it now reads, the exemption is affixed to the compensation, and not merely to the claim. The strength of the desire to give protection to the workman is accentuated also by the final words of the section, ‘which exemption may not be waived.’ The claimant is to be protected against his own improvidence or folly. Cf. the cognate sections 24 and 32. We are blind to the policy of workmen's compensation if we say that the purpose of the exemption, thus emphatically guarded, is to promote the convenience of the state by withdrawing the occasion for conflicting claims of ownership. There shines through the statute, both here and in related sections, a worthier conception of the duty of the state to the helpless and hapless in an industrial society. From the viewpoint of mere convenience, an assignment or release or commutation of an award is a matter of indifference to the state or its officials. Payments are made for the most part by the employer or an insurer. When not made by these, they are made from the state fund. Release, instead of imperiling the fund, would have a tendency to strengthen it. A public officer may assign his salary after an installment is already due. Mechem on Public Officers, §§ 874, 875; Bliss v. Lawrence, 58 N. Y. 442, 17 Am. Rep. 273;Bowery Nat. Bank v. Wilson, 122 N. Y. 478, 25 N. E. 855, 9 L. R. A. 706, 19 Am. St. Rep. 507; Matter of Worthington, 141 N. Y. 9, 35 N. E. 929,23 L. R. A. 97. Cf. McCoun v. Dorsheimer, 1 Clark Ch. 144; Hadley v. Peabody, 13 Gray (Mass.) 200. Not so, a disabled workman who would part with his award. ‘Compensation and benefits shall be paid only to employees or their dependents.’ Workmen's Compensation Law, § 33. At the root of the exemption is something more benignant than bureaucratic formalism, a dislike of complicating documents. The exemption like the compensation is for the protection of the man.

One other signpost of intention is at hand to give direction to the way. It is found in a different statute, but one in pari materia. A statute long in force provides that ‘the earnings of the judgment debtor for his personal services rendered within sixty days' before supplementary proceedings are exempt from seizure ‘when it is made to appear by his oath or otherwise that those earnings are necessary for the use of a family wholly or partly supported by his labor.’ Civil Practice Act, § 777; Code Civ. Proc. § 2463. Execution is permissible for 10 per cent. of his accruing wages, but even that percentage is exempt if the wages are less than $12 per week. Civil Practice Act, § 684. Compensation or benefits under the Workmen's Compensation Law are not earnings for personal services. The result will therefore be, unless the exemption follows the payment into the hands of the injured workman, that he will be in a position less favorable than his brother workmen who are blessed with health and strength. Their earnings for 60 days, if necessary for the care of the family, are withdrawn from the reach of creditors. His meager allowance may be diverted from his family and used to pay his debts. The vast majority of awards under the act are payable periodically in biweekly installments. Workmen's Comp. Law, § 25. Commutation is exceptional, and may be ordered by the Industrial Board only when found to be ‘in the interests of justice.’ Section 25; Adams v. New York, O. & W. R. Co., 175...